prulink bond fund - pru life uk · established in 1996, pru life uk is a subsidiary of british...

PRULink Bond FundFund Fact Sheet December 2019

(all data as at 02 January 2020 unless otherwise stated)

Launch Date Fund Classification

NAVPu (PHP) Minimum Risk Rating

Fund Size Fund Manager

Fund Currency Annual Management FeeFinancial Year End Benchmark

Fund Objective

Annualized Performance

Fund

Highest NAVPU reached

Lowest NAVPU reached

Top 5 Holdings:

PHILIPPINE GOVERNMENT BOND 6.25%

03/12/2024

Fund Manager's Commentary

Markit iBoxx ALBI Philippines

5-Year

Disclaimer: The views contained herein are only a general view on what may happen and Pru Life UK does not guarantee its accuracy. Established in 1996, Pru Life UK is a subsidiary of British financial services giant Prudential plc.

Pru Life UK is the pioneer and current market leader of unit-linked or investment-linked life insurance products, and is one of the first life insurance companies approved to market US dollar-denominated policies in the country.

Pru Life UK is a life insurance company and is not engaged in the business of selling pre-need plans. Pru Life UK and Prudential plc are not affiliated with Prudential Financial, Inc. (a US-registered company), Philippine Prudential

Life Insurance Company, Prudentialife Plans, Inc. or Prudential Guarantee and Assurance, Inc. (all Philippine-registered companies). For more information about us, please visit www.prulifeuk.com.ph.

December was a good month for the Philippine local rates market, which saw yields generally falling across the curve. The Markit iBoxx

ALBI Philippine index posted a return of 1.6% over the month, bringing the full-year return to 18.8%.

During the month, doubts over a China-US trade deal and weaker-than-expected US ISM manufacturing data initially exerted

downward pressure on US Treasury (UST) yields. However, US yields reversed course subsequently on the back of strong jobs data and

the announcement of an interim Phase One deal mid-month. The risk-on environment led to a bear steepening of the UST market, with

yield rises led by the long end of the curve.

Against this backdrop, Philippine local rates outperformed UST in December. The benchmark 10-year Philippine government bond yield

ended at 4.3%, down 29 bps lower over the month and nearly 270 bps over the year.

Fund Price Chart

Fund Statistics

Initial NAVPU

(24 Sep 02)

The Fund Fact Sheet provides general information concerning the underlying funds of Pru Life UK's unit-linked policies and is not intended to serve as

individual investment advice. The manager of the fund is Eastspring Investments (Singapore) Limited.

Diversified

1.89%

2.81393

17.93%

Key Information and Investment Disclosure

1.53% p.a.PHP 19.37 billion

Philippine Peso

31st December

The fund seeks to achieve an optimal level of income in the medium term together with long-term capital growth through investments in fixed income securities and

money market instruments.

Asset Allocation

1-Month Year-to-date Since Inception

17.93% 6.17%1-Year

1.26%

The fund returns are net of Annual Management Charge. Past performance is not

necessarily indicative of the future or likely performance of the fund.

(02 Jan 20)

(24 Sep 02) 1.00000

1.00000

PHILIPPINES (REPUBLIC OF) 5.875%

03/01/2032

24 September 2002

1 (Conservative)2.81393

PHILIPPINES (REPUBLIC OF) 8%

07/19/2031


12/16/2035


10/24/2037

7.8%

6.3%

5.2%

4.2%

4.2%

Eastspring Investments Limited

1.0

1.5

2.0

2.5

3.0

2-Ju

l-02

2-Se

p-0

3

2-N

ov-

04

2-Ja

n-0

6

2-M

ar-0

7

2-M

ay-0

8

2-Ju

l-09

2-Se

p-1

0

2-N

ov-

11

2-Ja

n-1

3

2-M

ar-1

4

2-M

ay-1

5

2-Ju

l-16

2-Se

p-1

7

2-N

ov-

18

2-Ja

n-2

0

Government Bond 91.5%

Corporate Bond 8.4%

Cash and others 0.1%

Fund Manager's Commentary on PRULink Bond Fund





On the policy front, Bangko Sentral ng Pilipinas (BSP) kept interest rates unchanged for a second month in December, after cutting

rates thrice. The decision was supported by the benign inflation environment, with forecasts for 2020 and 2021 remaining within the

target range of 2.0%–4.0%. Nevertheless, officials said upside risks to inflation remained, mainly driven by oil price volatility amid

geopolitical tensions in the Middle East and the effects of recent weather disturbances on domestic food prices. In addition, domestic

demand remained resilient and fiscal spending has increased, although external headwinds could cap the upside to price pressures.

Headline inflation rose 1.3% YoY in November, from 0.8% YoY in October, after five months of deceleration. The uptick was due to

price increases in selected food items. The figure remains consistent within BSP’s current assessment. The trade deficit narrowed to

USD3.3 billion in October as exports rose marginally by 0.1% YoY, whereas imports declined by 10.8% YoY as most major import

segments shrank.

In December, the Fund’s overall duration overweight contributed positively to performance over the month, given the fall in local

rates, although select bond issues negated that.

We maintained our duration overweight over the month. We continue to favour the Philippines’ growth story, given our expectations

for a continued increase in public investment spending and robust domestic demand. While inflation has ticked up slightly, it should

remain within the BSP’s target range. We expect the central bank to resume policy easing and cuts to reserve requirement ratios, and

will continue to maintain the Fund’s overall duration overweight.

PRULink Managed Fund

Fund Fact Sheet December 2019



NAVpu (PHP) Minimum Risk Rating



Fund Objective

Performance Chart Annualized Performance

Fund

Highest NAVPU reached Lowest NAVPU reached Initial NAVPU

Asset Allocation


1-Month

7.18%

(23 Oct 02) 0.99568

1.12% 14.77%

1-Year

14.77%

Since InceptionYear-to-date





3.31611

PHP 5.66 billionPhilippine Peso

The fund seeks to optimize medium to long-term capital and income growth through investment in fixed income securities, money market instruments and shares of

stocks listed in the Philippine Stock Exchange.

The Fund Fact Sheet provides general information concerning the underlying funds of Pru Life UK's unit-linked policies and is not intended to serve as individual

investment advice. The manager of the fund is Eastspring Investments (Singapore) Limited.



80% Markit iBoxx ALB Philippines + 20% PCI * PCI - Philippines Composite Index

(24 Sep 02) 1.00000

(11 Aug 16) 3.34119


necessarily indicative of the future or likely performance of the fund. The Peso

Bond Fund and Equity Fund have served as underlying funds of the Managed and

Growth Funds prior to the funds' launch date.

24 September 2002

1.79% p.a.

Philippine equities rose in December, with the Philippine Stock Exchange Index (PSEi) advancing around 1.0% during the month. Domestic equities

were buoyed by the broader rally in Asian equities, which rose on the hopes for the US-China trade deal and the cancellation of the additional US

tariffs on goods scheduled to take effect on 15 December. Inflation remained benign at 1.3% in November, below the central bank's 2-4% target. The

central bank kept key policy rates unchanged in December after easing by 75 basis points earlier in the year. The central bank also reduced the reserve

requirement for banks by 400 basis points in 2019, of which the last 100 basis points took effect in December. In this environment, the Markit iBoxx

ALBI Philippine index rose, posting a return of around 1.6%.

From a global perspective, trade war tensions have diminished with the preliminary US-China trade deal set to be signed in January. Global business

sentiment has improved over the last few months and we expect this to continue, with a broadening global recovery in the coming months leading to a

coordinated improvement in markets. Whilst this is the case, the US-Iran conflict could keep geopolitical risk elevated, bringing 3.5 million barrels of

daily oil production under a higher risk of disruption.

31st December

Diversified

2 (Moderate)

5-Year

1.53%

Fund Statistics

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2-Ju

l-02

2-Se

p-0

3

2-N

ov-

04

2-Ja

n-0

6

2-M

ar-0

7

2-M

ay-0

8

2-Ju

l-09

2-Se

p-1

0

2-N

ov-

11

2-Ja

n-1

3

2-M

ar-1

4

2-M

ay-1

5

2-Ju

l-16

2-Se

p-1

7

2-N

ov-

18

2-Ja

n-2

0

Bond 80.1%

Equity 19.8%


Increasingly we expect US and European government bonds to come under pressure as the economy rebounds, with investors shunning safe-haven

assets. Our preference is to increase exposure to higher yielding fixed income assets in both the US and Asia, that offer superior income with less risk

of capital loss against the backdrop of a recovering global economy.

The team’s global equity overweight is sizeable, supported by still inexpensive equity valuations and improving fundamentals. There are signs of the

equity market being overbought, however, and we may see some pull back, thus we have started to pare back from a maximum overweight position

most recently. Should economic sentiment continue to rebound, and trade war tensions diminish, further upside in global stocks is still possible, and

we will continue to monitor our indicators for any change to the market environment and adjust positioning accordingly.

On the domestic front, we continue to expect domestic equities to benefit more than bonds from looser monetary policy in the longer term. However,

we recognise the headwinds from November’s MSCI index rebalancing and the very low foreign investor participation in the market currently.

Therefore, we are positioned broadly neutral to the asset class in the Philippine Balanced Portfolios, as EM macro risk remains elevated and technical

indicators are not yet favourable. Once the phase one US-China trade deal is signed, and there is greater clarity around the details, we expect domestic

equities to benefit from the broader risk-on sentiment in markets.





Fund Manager's Commentary on PRULink Managed Fund

PRULink US Dollar Bond Fund



NAVpu (USD) Minimum Risk Rating

Fund Size Fund ManagerFund Currency Annual Management Fee

Financial Year End Benchmark

Fund Objective


Fund

Highest NAVPU reached Lowest NAVPU reached Initial NAVPU

Asset Allocation Top 5 Holdings:


JPM USD EMBI Global Philippines


1 (Conservative)

Fund Statistics

In December, the Philippine USD sovereign bond market posted a decent return, as gains from tighter credit spreads helped offset mixed performance

in US interest rates. The JPMorgan EMBI Global Philippine Index rose by 0.36%, bringing its full-year return to 15.53%.

During the month, doubts over a China-US trade deal and weaker-than-expected US ISM manufacturing data initially exerted downward pressure on

US Treasury (UST) yields. However, US yields reversed course subsequently on the back of strong jobs data and the announcement of an interim Phase

One deal mid-month. Meanwhile, the Federal Reserve (Fed) kept rates unchanged amid steady economic growth and signalled a pause in the rate-cut

cycle in 2020. The risk-on environment led to a bear steepening of the UST market, with yield rises led by the long end of the curve.

Against this backdrop of improved risk sentiment, Asian credit spreads tightened over the month, including those in Philippine sovereigns.

1-Month

31st December

Year-to-date

14.08%Since Inception

6.51%

2.8493

1.53% p.a.

Diversified

1-Year

03 June 2003

USD 135.08 millionUS Dollar

(03 Jun 03) 1.00000





(05 Aug 03) 0.96080

0.29% 14.08%

(06 Sep 19) 2.9138



5-Year

11.1%

9.5%

9.4%

7.8%

7.7%PHILIPPINES (REPUBLIC OF) 3%

02/01/2028


02/02/2030


10/23/2034


01/14/2031


03/01/2041

3.78%



Fund Fact Sheet


The fund seeks to achieve an optimal level of income in the medium term together with long-term capital growth through investments in fixed income securities

denominated in USD.

December 2019

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Government Bond 94.0%

Quasi Government 5.0%

FI Funds 0.7%

Corporate Bond 0.2%


On the policy front, Bangko Sentral ng Pilipinas (BSP) kept interest rates unchanged for a second month in December, after cutting rates thrice. The

decision was supported by the benign inflation environment, with forecasts for 2020 and 2021 remaining within the target range of 2.0%– 4.0%.

Nevertheless, officials said upside risks to inflation remained, mainly driven by oil price volatility amid geopolitical tensions in the Middle East and the

effects of recent weather disturbances on domestic food prices. In addition, domestic demand remained resilient and fiscal spending has increased,

although external headwinds could cap the upside to price pressures.

Headline inflation rose 1.3% YoY in November, from 0.8% YoY in October, after five months of deceleration. The uptick was due to price increases in

selected food items. The figure remains consistent within BSP’s current assessment. The trade deficit narrowed to USD3.3 billion in October as exports

rose marginally by 0.1% YoY, whereas imports declined by 10.8% YoY as most major import segments shrank.

In December, positive spread effects lifted the Fund's performance but this was partially offset by the overall duration overweight.

We maintained our duration overweight position during the month. While we expect the Fed to be on an extended pause in 2020, the hurdle to raise

rates remains high given benign inflation. Hence, we expect interest rates to be range bound and the environment accommodative. We are happy to

maintain a moderate duration overweight for the Fund in the near term.





Fund Manager's Commentary on PRULink US Dollar Bond Fund

PRULink Growth FundFund Fact Sheet December 2019




Fund Size

Fund Currency Annual Management Fee


Fund Objective


Fund



Initial NAVPU

Asset Allocation



(22 Jul 05) 1.00000

3 (Aggressive)

5-Year

Philippine Peso

The fund seeks to optimize medium to long-term capital and income growth, with an emphasis on strong capital growth, through a greater focus of investment in shares of

stocks listed in the Philippines. The fund also invests in fixed income securities, and money market instruments.


Diversified



22 July 2005

PHP 13.75 billion Fund Manager

2.25% p.a.

3.97875

0.99584

Philippine equities rose in December, with the Philippine Stock Exchange Index (PSEi) advancing around 1.0% during the month.

Domestic equities were buoyed by the broader rally in Asian equities, which rose on the hopes for the US-China trade deal and the

cancellation of the additional US tariffs on goods scheduled to take effect on 15 December. Inflation remained benign at 1.3% in

November, below the central bank's 2-4% target. The central bank kept key policy rates unchanged in December after easing by 75

basis points earlier in the year. The central bank also reduced the reserve requirement for banks by 400 basis points in 2019, of which

the last 100 basis points took effect in December. In this environment, the Markit iBoxx ALBI Philippine index rose, posting a return of

around 1.6%.

From a global perspective, trade war tensions have diminished with the preliminary US-China trade deal set to be signed in January.

Global business sentiment has improved over the last few months and we expect this to continue, with a broadening global recovery in

the coming months leading to a coordinated improvement in markets. Whilst this is the case, the US-Iran conflict could keep

geopolitical risk elevated, bringing 3.5 million barrels of daily oil production under a higher risk of disruption.


necessarily indicative of the future or likely performance of the fund. The Peso

Bond Fund and Equity Fund have served as underlying funds of the Managed and

Growth Funds prior to the funds' launch date.

(30 Jan 18) 4.45577

1-Month

31st December

Year-to-date

6.31%Since Inception

10.02%

Fund Statistics

0.66% 6.31% 0.77%

(28 Oct 08)





1-Year

20% Markit iBoxx ALBI Philippines + 80% PCI

*PCI - Philippines Composite Index

0.5

1.5

2.5

3.5

4.5

5.5

Equity 79.7%

Bond 19.9%


Increasingly we expect US and European government bonds to come under pressure as the economy rebounds, with investors

shunning safe-haven assets. Our preference is to increase exposure to higher yielding fixed income assets in both the US and Asia, that

offer superior income with less risk of capital loss against the backdrop of a recovering global economy.

The team’s global equity overweight is sizeable, supported by still inexpensive equity valuations and improving fundamentals. There

are signs of the equity market being overbought, however, and we may see some pull back, thus we have started to pare back from a

maximum overweight position most recently. Should economic sentiment continue to rebound, and trade war tensions diminish,

further upside in global stocks is still possible, and we will continue to monitor our indicators for any change to the market

environment and adjust positioning accordingly.

On the domestic front, we continue to expect domestic equities to benefit more than bonds from looser monetary policy in the longer

term. However, we recognise the headwinds from November’s MSCI index rebalancing and the very low foreign investor participation

in the market currently. Therefore, we are positioned broadly neutral to the asset class in the Philippine Balanced Portfolios, as EM

macro risk remains elevated and technical indicators are not yet favourable. Once the phase one US-China trade deal is signed, and

there is greater clarity around the details, we expect domestic equities to benefit from the broader risk-on sentiment in markets.

Fund Manager's Commentary on PRULink Growth Fund





PRULink Equity FundFund Fact Sheet December 2019






Fund Objective


Fund



Initial NAVPU

Sector Allocation Top 5 Holdings:


Philippines Composite Index

Performance Review

Philippine equities rose in tandem with other Asian markets, with the Philippine Stock Exchange Index (PSEi) advancing 1.0% in December. For the full

year, the PSEi rose 4.7% in local currency terms.

The Philippines Peso strengthened in 2019, appreciating 3.6% against the greenback. Most of the gains came in the first half of the calendar year.

Inflation remained benign at 1.3% in November, below the central bank's 2-4% target. The central bank kept key policy rates unchanged in December

after easing by 75 basis points earlier in the year. The central bank also reduced reserve requirement for banks by 400 basis points in 2019, of which

the last 100 basis points took effect in December.

The current account posted a surplus of US$654mn in 3Q19 as goods imports slowed whilst service exports performed well, narrowing the 9M19

current account deficit to -0.4% of GDP.

Growth in overseas Filipino workers’ remittances accelerated to 8% year-on-year in October from 6.3% in the previous month.


0.42505

2.28633 3 (Aggressive)





0.52%

1-Year 5-Year

4.00%

(23 Oct 07) 1.00000

Fund Statistics

2.66632

7.01%

Diversified

(28 Oct 08)

23 October 2007

PHP 50.51 billionPhilippine Peso

31st December


The fund seeks to optimize medium to long-term capital growth through investments in shares of stocks listed in the Philippines.



SM INVESTMENTS CORP

SM PRIME HOLDINGS INC.

AYALA LAND INC.

BDO UNIBANK INC

JG SUMMIT HOLDINGS INC. 5.7%

Year-to-date Since Inception

4.00%

9.1%

7.7%



0.69%

9.7%

9.1%

(30 Jan 18)

1-Month

2.25% p.a.

0.3

0.8

1.3

1.8

2.3

2.8

Industrials 35.0%

Real Estate 22.0%

Financials 21.9%

Utilities 6.4%

Consumer staples 5.1%

Communication Services 4.4%

Consumer discretionary 3.0%

Energy 0.7%


Fund Manager's Commentary on PRULink Equity FundKey Contributors

The underweight in SM Investments and Universal Robina, as well as the overweight in LT Group, contributed to relative performance in December.

SM Investments’ share price fell in December, benefiting relative performance. The Fund’s exposure to the stock was capped at 10% to ensure

portfolio diversification, while its weight in the PSEi was close to 16%.

The overweight in LT Group also contributed to relative performance. The company’s share price rebounded 8.3% in December after declining for the

past months due to upcoming excise tax hike on tobacco products.

The underweight in Universal Robina also contributed to relative performance as its share price corrected 3.3% in December amid concerns that rising

commodity prices could hurt margins.

Key Detractors

The overweight in First Philippine and East West Banking Corp, as well as the underweight in Jollibee Foods, detracted from relative performance in

December.

Share prices of First Philippine and East West Banking retreated 8.1% and 5.9% respectively in December, weighing on relative performance.

The underweight in Jollibee Food also hurt the Fund’s relative performance as share price rebounded following sharp correction in the previous month.

Fund Activity

There was no major Fund activity in December.

Outlook

Philippines’ macro fundamentals remain intact, underpinned by favourable demographics and strong domestic demand.

The government's tax reform package is expected to raise tax revenue and improve funding for infrastructure initiatives, thus supporting long-term

economic growth. There is also scope for monetary easing in view of benign inflation.

The Fund is overweight in selected Utilities due to their attractive valuations, but underweight richly-valued Consumer Staples and Conglomerates.





PRULink Proactive FundFund Fact Sheet December 2019


Launch Date Fund Classification NAVpu (PHP) Minimum Risk Rating

Fund Size Fund ManagerFund Currency Annual Management FeeFinancial Year End Benchmark

Fund Objective


Fund


Lowest NAVPU reahed

Initial NAVPU

Asset Allocation


50% Markit iBoxx ALBI Philippines + 50% PCI

Philippine equities rose in December, with the Philippine Stock Exchange Index (PSEi) advancing around 1.0% during the month.

Domestic equities were buoyed by the broader rally in Asian equities, which rose on the hopes for the US-China trade deal and the

cancellation of the additional US tariffs on goods scheduled to take effect on 15 December. Inflation remained benign at 1.3% in

November, below the central bank's 2-4% target. The central bank kept key policy rates unchanged in December after easing by 75

basis points earlier in the year. The central bank also reduced the reserve requirement for banks by 400 basis points in 2019, of which

the last 100 basis points took effect in December. In this environment, the Markit iBoxx ALBI Philippine index rose, posting a return of

around 1.6%.

From a global perspective, trade war tensions have diminished with the preliminary US-China trade deal set to be signed in January.

Global business sentiment has improved over the last few months and we expect this to continue, with a broadening global recovery in

the coming months leading to a coordinated improvement in markets. Whilst this is the case, the US-Iran conflict could keep

geopolitical risk elevated, bringing 3.5 million barrels of daily oil production under a higher risk of disruption.

* PCI - Philippines Composite Index


3 (Aggressive)

2.25% p.a.








9.93% 7.63%0.73%

Fund Statistics

9.93%

(03 Mar 09) 0.99950

(17 Feb 09) 1.00000

(30 Jan 18) 2.34008

1-Month 1-Year 5-Year

0.87%

The fund seeks to optimize medium to long-term capital and income growth with emphasis on dynamic asset allocation by fund managers through investment in fixed

income securities, money market instruments and shares of stocks listed in the Philippines.



17 February 2009

Eastspring Investments LimitedPHP 17.70 billionPhilippine Peso

31st December

2.22512Diversified

0.8

1.3

1.8

2.3

2.8

Equity 50.0%

Bond 49.8%


Fund Manager's Commentary on PRULink Proactive FundIncreasingly we expect US and European government bonds to come under pressure as the economy rebounds, with investors

shunning safe-haven assets. Our preference is to increase exposure to higher yielding fixed income assets in both the US and Asia, that

offer superior income with less risk of capital loss against the backdrop of a recovering global economy.

The team’s global equity overweight is sizeable, supported by still inexpensive equity valuations and improving fundamentals. There

are signs of the equity market being overbought, however, and we may see some pull back, thus we have started to pare back from a

maximum overweight position most recently. Should economic sentiment continue to rebound, and trade war tensions diminish,

further upside in global stocks is still possible, and we will continue to monitor our indicators for any change to the market

environment and adjust positioning accordingly.

On the domestic front, we continue to expect domestic equities to benefit more than bonds from looser monetary policy in the longer

term. However, we recognise the headwinds from November’s MSCI index rebalancing and the very low foreign investor participation

in the market currently. Therefore, we are positioned broadly neutral to the asset class in the Philippine Balanced Portfolios, as EM

macro risk remains elevated and technical indicators are not yet favourable. Once the phase one US-China trade deal is signed, and

there is greater clarity around the details, we expect domestic equities to benefit from the broader risk-on sentiment in markets.





PRULink Asian Local Bond FundFund Fact Sheet December 2019


Launch Date Fund ClassificationNAVpu (USD) Minimum Risk Rating




Fund Objective


Fund



Initial NAVPU


THAILAND (KINGDOM OF) 4%

06/17/2066

KOREA (REPUBLIC OF) 2.125%

06/10/2027

INDONESIA (REPUBLIC OF) 5.625%

US TREASURY BILL

KOREA (REPUBLIC OF) 1.875%

06/10/2029


0.90362

Diversified



28 January 2012

USD 10.16 million

2.24%



1.10387

2 (Moderate)


9.19% 1.25%


Markit iBoxx ALBI x Chn Twd Cust

1.1%

1.00000

(02 Jan 20)

1.1%

Asian local currency bond markets ended the year with a positive tone as broad Asian currency strength led to gains in USD terms. Over the month,

the custom Markit iBoxx Asian Local Bond index rose 1.6%, adding to the strong full-year return of 9.6%.

During the month, doubts over a China-US trade deal and weaker than expected US ISM manufacturing data initially exerted downward pressure on US

Treasury (UST) yields. However, UST reversed course subsequently on the back of strong job data and the announcement of an interim Phase One deal

mid-month. The risk-on environment led to a bear steepening of the US Treasury curve, with yield rises led by the long end of the curve.

In Asia, however, performance of domestic government bonds was more mixed; Yields in selected government bond markets such as Korea and Hong

Kong bear steepened, influenced by the US Treasury moves. Short-dated India local currency bond yields also moved higher after the central bank

surprised the market with a policy rate pause instead of a rate cut. However, yield declines were seen in Philippines, Thailand and Indonesia Asian

central banks there took a pause from their rate cut cycle. China proved an exception by trimming its 14-day reverse repo rate, following a cut in its 7-

day rate in the prior month. This contributed to the modest declines in onshore government bond yields.

1-Year

Fund Statistics

9.19%

1.80% p.a.

1-Month

1.08%

1.1%

US Dollar

1.0%

05/15/2023

06/25/2020

(30 Sep 15)

5-Year

1.2%





1.10387

(28 Jan 12)

31st December


The fund is structured as a feeder fund which invests in the Eastspring Investments – Asian Local Bond Fund (EI-Asian Local Bond Fund). The EI-Asian Local Bond Fund

invests in a diversified portfolio consisting primarily of fixed income / debt securities issued by Asian entities or their subsidiaries. This Fund’s portfolio primarily consists of

securities denominated in the various Asian currencies and aims to maximize total returns through investing in fixed income or debt securities that are rated as well as

unrated.

0.85

0.90

0.95

1.00

1.05

1.10

Treasury 74.3%

Other financial institutions 4.0%

Foreign agencies 3.3%

Banking 3.2%

Other REIT 2.8%

Home construction 1.2%

Wireless 1.2%

Life insurance 1.0%

Finance companies 1.0%


Fund Manager's Commentary on PRULink Asian Local Bond Fund

More significantly, returns of Asian local bonds were lifted by the broad Asian currency strength against the USD, which weakened in December as

improved risk appetite curtailed demand for safe haven assets Trade sensitive currencies such as Korean won, Singapore dollar and Taiwan dollar fared

well rising between 1.6- 2.2%. The Malaysian ringgit also appreciated by 2.1% against the US dollar. The Indian rupee, however, underperformed amid

continued growth and fiscal concerns.

In December, the Fund benefitted from the currency and duration overweight in Indonesia and Philippines, as well as the currency overweight in

Malaysian ringgit and Chinese renminbi. This offset underperformance due to the underweight in Thai baht as well as duration overweight in Korea

and via US Treasuries.

During the month, we reduced the duration exposure in Thailand and US Treasuries. The agreement of a Phase One trade deal between US and China

has removed near term downside risk on the global economy. However we maintain our duration overweight in markets such as Indonesia, Korea,

Philippines and Malaysia where we see room for monetary policy support. We also maintain our overweight in Asian currencies as we expect

continued capital flows to Asia driven by improved growth outlook.





PRULink Asia Pacific Equity FundFund Fact Sheet December 2019


Launch Date Fund ClassificationNAVpu (USD) Minimum Risk Rating


Fund Objective


Fund



Initial reached



3 (Aggressive)


MSCI APXJ Index (Net)


1-Year

13.37%5-Year

(29 Jan 18) 1.24563

0.69551

13.37% 1.04%1.40%

Fund Statistics

(22 Jan 16)

(26 Feb 13) 1.00000

TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD

6.87%







26 February 2013


31st December

The fund is structured as a feeder fund which invests in the Eastspring Investments – Asia Pacific Equity Fund, which aims to maximize long-term total return by investing

primarily in equity and equity-related securities of companies which are incorporated, listed in or have their area of primary activity in the Asia Pacific ex-Japan Region.

This fund may also invest in depository receipts including American Depositary Receipts and Global Depositary Receipts, debt securities convertible into common shares,

preference shares and warrants.


1.07356Diversified

2.05% p.a.

1-Month

Performance Review

Global equity markets ended the year with solid monthly gains almost everywhere with Emerging Markets outperforming Developed Markets by some

distance. The catalyst for the rally was a signal that the US and China were close to signing a trade deal, and the signing of a replacement to the NAFTA

accord. Meanwhile, the US dollar came under pressure as investors wagered the US economic outperformance was peaking, helping Emerging Market

currencies and equities.

The MSCI AC World index rose 3.6% with the US 2.9% higher, Europe (ex UK) 3.9% better, and the UK adding 5.2%. Emerging Markets outperformed

gaining 7.5%, led by Latin America that rose 10.4% while Asia Pacific ex Japan gained 19.5%.

Emerging Asia saw Korea outperform to gain 10.4%, almost completely offsetting losses in the year to the end of November with a strengthening won

responsible for much of the advance, which in turn was supported by better macro data and memory-sector sentiment. Taiwan retained its

momentum to add another 7.5%, with the index once again led higher by chipmakers and stocks in the iPhone component chain.



SAMSUNG ELECTRONICS LTD

TENCENT HOLDINGS LTD

ALIBABA GROUP HOLDING ADR

CHINA CONSTRUCTION BANK CORP H

6.2%

5.4%

4.1%

4.1%

4.1%

0.5

0.8

1.1

1.4

Financials 29.3%

Information technology 19.7%


Real estate 8.2%

Industrials 8.0%

Communcation services 7.8%

Materials 5.6%

Energy 4.5%


Utilities 1.2%

Health care 0.6%


Fund Manager's Commentary on PRULink Asia Pacific Equity Fund





MSCI China added 8.3% as a swath of economic data suggested the recent slowdown had at least bottomed, and on hopes the Phase I trade deal with

the US would soon be signed. Hong Kong once again underperformed with street protests showing no signs of abating; the MSCI index here increased

just 4.0%.

Elsewhere, South East Asia underperformed with Thailand again bringing up the rear and adding just 0.9% as the economic slowdown there showed no

sign of abating. Indonesia was a notable exception and added 7.1% as its central bank kept rates on hold. India underperformed again in a volatile

month as the central bank surprised the market by keeping rates on hold and lowering GDP forecasts. Higher oil prices also provided an extra

headwind.

Australia underperformed and added just 1.5% despite rising bond yields pushing the Aussie dollar higher, with another bank scandal weighing on the

broader market. New Zealand continued its outperformance from November when the central bank unexpectedly kept rates on hold and added

another 5%.

Returns are MSCI index total returns for the specific country or region mentioned, in US dollar terms, unless otherwise stated.

Key Contributors

The Fund is overweight property developer China Overseas Land (Coli) and this added value after a 16% return in the stock in December. Coli

benefitted from better-than-expected loan data and after the company reported sales growth in the first ten months of 2019. We continue to see the

developer as the best in the sector with a large landbank in 20 cities across China with a good quality balance sheet at an attractive valuation and so

we keep our overweight position.

Being overweight China Yongda Automobiles benefited the fund post a 26% rise in the stock after some confidence returned to China’s beleaguered

auto sector and Yongda’s management gave some bullish appraisals on the company’s 2020 outlook. The car dealership is exposed to demand in the

high-end car market including the BMW and Porsche ranges which we believe the market has undervalued, so we keep our overweight.

The Fund is overweight Samsung Electronics which added value post a 13% gain in the stock price as both the Korean economy saw improved macro

conditions and the semiconductor sector showed more signs of price and demand recovery. Recovering DRAM (memory) prices also provided support

which should feed into better profitability in 2020, and thus we keep our overweight position at current valuations.

Key Detractors

Shares in Australian basic resources group Whitehaven Coal fell sharply in December and detracted fom Fund performance. The company announced

in November production downgrades at its Maules Creek mine in New South Wales as it faces dust and labour cost problems, sending the stock

sharply lower. Although we trimmed our holding in December, we remain overweight as the stock now represents deep value.

Shares in Catcher Technology fell 7% after its November sales figures disappointed some in the market and its margins also came in slightly lighter than

expected. We maintain our overweight position as the company is well placed to gain market share and to be the major casing supplier to the new

iPhone SE2. This should improve margins while we think the company is also likely to maintain its attractive dividend yield.

The Fund is overweight Kasikornbank but the stock fell marginally against a strong benchmark index and so dragged on performance. There was little in

the way of stock-specific newsflow however the Thailand market underperformed as weak macroeconomic data indicated the economy was set for a

slowdown. We continue to see substantial upside potential.

Fund Activity

In December, the Fund added to Alibaba and cut holdings in Whitehaven Coal, TSMC and City Developments.

Outlook

Asian equities are trading well below their long-term averages and are very cheap relative to the developed markets of the west. Investors have

continued to pay a very high price for growth and quality stocks while ignoring most value stocks. This has created a large valuation anomaly within

Asian equity markets which the Fund is well positioned to capture.

While equity markets are sensitive to the ongoing trade dispute and moderating global growth, we still see a backdrop of long-term structural

economic growth across Asia and a diverse corporate sector which offers us many investment opportunities over the long-term.







Fund Objective


Fund

Highest NAVPU reachedLowest NAVPU reachedInitial NAVPU

Top 5 Holdings:


3 (Aggressive)


3.99%Year-to-date Since Inception

MSCI Emerging Markets (Net Div)

Fund Statistics 1.24055

31st December

1-Month 1-Year

3.4%





12.90% 1.67%

(01 Apr 14) 1.00000

(22 Jan 16) 0.63696

1.10023Diversified

PRUlink Global Emerging Markets

Dynamic Fund

The fund is structured as a feeder fund which invests in the Eastspring Investments – Global Emerging Markets Dynamic Fund, which aims to generate long-term capital

growth through a concentrated portfolio of equities, equity-related securities and bonds. This fund will invest primarily in securities of companies which are incorporated,

or listed in, or operating principally from, or carrying on significant business in, or derive substantial revenue from, or whose subsidiaries, related or associated

corporations derive substantial revenue from the emerging markets worldwide. This fund may also invest in depository receipts including American Depositary Receipts

and Global Depositary Receipts, preference shares and warrants.

(29 Jan 18)

5.9%

5.5%

3.7%

3.4%

Market Review

Global equity markets ended the year with solid monthly gains almost everywhere with Emerging Markets outperforming Developed Markets by some

distance. The catalyst for the rally was a signal the US and China were close to signing a trade deal, and the signing of a replacement to the NAFTA

accord. Meanwhile, the US dollar came under pressure as investors wagered the US economic outperformance was peaking, helping Emerging Market

currencies and equities.

The MSCI AC World index rose 3.6% with the US 2.9% higher, Europe (ex UK) 3.9% better, and the UK adding 5.2%. Emerging Markets outperformed

gaining 7.5%, led by Latin America that rose 10.4% while Emerging Asia added 7.2%. EMEA also performed well to gain 7.1% as South Africa put on

9.7% after avoiding a credit downgrade by a ratings agency which in turn boosted the rand.

Sector Allocation

7.30% 12.90%5-Year





01 April 2014

USD 14.36 million2.05% p.a.US Dollar


TAIWAN SEMICONDUCTOR

MANUFACTURING CO LTD

SAMSUNG ELECTRONICS LTD

CHINA CONSTRUCTION BANK CORP H

NASPERS LTD

SBERBANK ROSSII

0.5

0.8

1.1

1.4

2-May-14 2-Oct-15 2-Mar-17 2-Aug-18 2-Jan-20

Financials 27.5%

Information technology 16.1%


Energy 10.3%


Industrials 5.8%

Materials 4.8%

Communication services 4.7%

Utilities 4.2%

Health care 2.2%

Real estate 2.1%


Fund Manager's Commentary on PRUlink Global Emerging Markets Dynamic Fund





Latin America’s outperformance was led by its largest market Brazil that saw a 12.5% rise although the region was aided by a 10.9% bounce in Chile

after its government promised reform in response to growing unrest, and leading the peso to bounce 7%. Other Latam currencies also made notable

gains to aid equity returns.

Emerging Asia saw Korea outperform to gain 10.4%, almost completely offsetting losses in the year to the end of November. Taiwan retained its

momentum to add another 7.5%, with the index once again led higher by chipmakers, particularly those in the 5G and iPhone component chain. MSCI

China added 8.3% as a swath of economic data suggested the recent slowdown had at least bottomed, and on hopes the Phase I trade deal with the US

would soon be signed but Hong Kong once again underperformed with street protests showing no signs of abating: the MSCI index here added just

4.0%.

Elsewhere, South East Asia underperformed with Thailand again bringing up the rear and adding just 0.9% as the economic slowdown there showed no

sign of abating. Indonesia was a notable exception and added 7.1% after its central bank kept rates on hold. India underperformed again in a volatile

month as the central bank surprised the market by keeping rates on hold and lowering GDP forecasts. Higher oil prices also provided an extra

headwind.

Returns are MSCI Index total returns for the specific country or region mentioned, in US dollar terms, unless otherwise stated.

Key Contributors to Performance

The Fund is overweight South African retailer Naspers, which contributed post a 6% rise in the stock albeit on little stock-specific newsflow. The South

African bourse rose strongly in December as the rand rallied almost 5% after the country avoided a ratings cut by a credit agency while we keep our

overweight position as we are optimistic management can deliver on reducing the discount to Tencent.

The Fund is also overweight property developer China Overseas Land (Coli) and this added value after a 16% return in the stock in December. Coli

benefitted from better-than-expected loan data and after the company reported sales growth in the first ten months of 2019. We continue to see the

attractively valued developer as the best in the sector with a large landbank in 20 cities across China with a good quality balance sheet and so we keep

our overweight position.

The Fund’s overweight position in Brazilian plane maker Embraer also paid off after a 16% rise in the stock over the month. Brazil was one of the best

performing indices globally in December aided by an appreciating real while Embraer benefitted from the deal with Boeing to sell its commercial

aircraft division edging closer. Despite the rally the Fund continues to see the stock as cheap relative to our view of sustainable earnings and we hold

our overweight position.

Key Detractors from Performance

The Fund is overweight Thai Finance group Bangkok Bank but the stock weighed on performance in December after it lost 8%. In December, the bank

said it was to buy the nearly 90% stake of Bank Permata in Indonesia from Standard Chartered and PT Astra International, but the price caught some in

the market by surprise and sent the stock lower. We retain our positive view on the valuation of the bank and its potential for improving ROE as they

move away from their historically conservative strategy.

The Fund does not own Tencent and this detracted from performance on a relative basis after the stock rose 14% as improving sentiment in consumer-

orientated internet stocks pushed the stock higher. Investors also favoured large-cap, liquid companies in China during December providing further

support. We continue to consider the stock as expensive at these levels.

The Fund’s overweight holding of Dongfeng Motor Group detracted from performance post a 2% fall in the stock price after it said it would sell a 12%

stake in French motor group Peugeot as part of the French group’s merger with Fiat-Chrysler. Dongfeng will keep a 4.5% stake in the merged entity and

this disappointed some in the market however we see the sale as a positive development and keep our overweight position in this attractively valued

stock.

Changes to the Portfolio

In December, the Fund opened a position in Banco Bradesco and cut a holding in ICICI Bank.

Strategy and Outlook

Global emerging market equities are trading well below their long-term averages and are very cheap relative to the developed markets of the west.

Investors have continued to pay a very high price for growth and quality stocks while ignoring most value stocks. This has created a large valuation

anomaly within emerging markets which the Fund is well positioned to capture.

While equity markets are sensitive to the ongoing trade dispute and moderating global growth, we still see a backdrop of long-term structural

economic growth across global emerging markets and a diverse corporate sector which offers us many investment opportunities over the long-term.

PRULink Cash Flow FundFund Fact Sheet December 2019


Launch Date Fund Classification NAVpu (USD) Minimum Risk Rating


Fund Objective


Fund


Lowest NAVPU reached Initial NAVPU


ISHARES SELECT DIVIDEND ETF

USD CASH (Alpha Committed)


50% JACI + 50% BofA ML US HY Con

2 (Moderate)

EASTSPRING INVESTMENTS ASIAN EQUITY INC - D

CLASS6.1%



8.45%5-Year


0.6%

Year-to-date Since Inception8.45% -0.69%

Global equities posted strong returns in December, with equity markets around the world capping off 2019 at multi-year or all-time highs, buoyed by

hopes for the phase one US-China trade deal and the cancellation of the additional US tariffs on goods scheduled to take effect on 15 December.

Sentiment was further supported by easing of the geopolitical risk and uncertainty that had dominated markets for much of 2019, notably on Brexit.

UK equities, and Europe more broadly, rallied sharply on the confirmation of a Conservative majority government in December’s general election.

Emerging markets and Asian stocks outperformed, although all major markets posted positive absolute returns. Emerging markets were buoyed by the

US-China trade agreement and December 15 tariffs cancellation, as well as a weaker dollar. Returns from Latin America were particularly strong.

Mexico benefited from the revised NAFTA deal, Brazil from encouraging economic data, with central bank rate cuts providing a further positive

backdrop for investors. In Asia, South Korea, China, and Taiwan rallied on the improved outlook for trade, with strong performance from technology

stocks. Better than expected economic data in China was an additional driver of returns, with China amongst the best performing regions globally. The

US and Europe were weaker relative to other regions in December, although US stocks reached fresh record highs led by gains from energy and

technology stocks. Europe enjoyed strong absolute returns, supported by more cyclical areas of the market.

-0.41%

Fund Statistics



17 November 2014


31st December


The fund seeks to provide investors with regular payout by investing in a diversified portfolio consisting primarily of high yield bonds and other fixed income/debt

securities denominated in US dollars, issued in the US market rated below BBB-, as well as fixed income/debt securities issued by Asian entities or their subsidiaries. The

Fund may in addition, at the Fund Manager's discretion, invest up to twenty percent (20%) of its assets in dividend yielding equities.

0.86352(17 Nov 14) 1.00000

(29 Apr 15) 1.01016

(15 Feb 16)

6.2%

1-Month

0.26%1-Year

1.95% p.a.

0.9652Diversified

EASTSPRING INVESTMENTS US HIGH YIELD BOND - D

CLASS54.9%

EASTSPRING INVESTMENTS ASIAN BOND - D CLASS

USD32.2%





0.8

0.9

1.0

1.1

2-Sep-14 2-Jan-16 2-May-17 2-Sep-18 2-Jan-20

Bond 87.0%

Equity 12.4%


Fund Manager's Commentary on PRULink Cash Flow FundIn the context of fixed income, sovereign yields broadly rose in December as markets remained firmly in risk-on mode amid the confirmation of the US-

China trade deal and the cancellation of additional December 15 tariffs. Long duration US Treasuries posted negative absolute returns in this

environment, whilst credit outperformed. Better-than-expected US economic data and the Fed’s projection that interest rates would remain on hold

during 2020 provided further support for higher yielding credit and put further upward pressure on Treasury yields.

Trade war tensions have diminished with the preliminary US-China trade deal set to be signed in January. Global business sentiment has improved over

the last few months and we expect this to continue, with a broadening global recovery in the coming months leading to a coordinated improvement in

markets. Whilst this is the case, the US-Iran conflict could keep geopolitical risk elevated, bringing 3.5 million barrels of daily oil production under a

higher risk of disruption.








The Fund has further increased its equity position and has moved overweight to US High Yield Bonds at the expense of Asian USD Bonds. .





PRULink Asian Balanced FundFund Fact Sheet December 2019




Fund Size Manager



Fund Objective


Fund


Lowest NAVPU reached Initial NAVPU



50% MSAP XJ+25% JACI+25% Markit iBoxx ALBIxCT









1.06900(29 Jan 18)

(09 Oct 17) 1.00000

0.87%11.61%

5-Year

n.a.4.36%

Fund Statistics

2 (Moderate)








09 October 2017

(29 Oct 18) 0.89236

1.01954

Diversified

1-Year1-Month

EASTSPRING INVESTMENTS ASIA PACIFIC EQUITY

EASTSPRING INVESTMENTS ASIAN LCL BD D

EASTSPRING INVESTMENTS ASIAN BOND D USD


60.1%

21.9%

15.4%

2.7%

11.61%

The PRUlink asian balanced fund (“ABF” or “the fund”) aims to maximize total return in the medium to long term by primarily investing in equities/equity-related securities

of companies,which are incorporated, listed in, or have their area of primary activity in the Asia Pacific region (excluding Japan) as well as fixed income/debt securities

issued by Asian entities or their subsidiaries. The fund is invested in three US dollar-denominated and Luxembourg-domiciled Asian SICAV funds of Eastspring Investments,

namely, Asia Pacific Equity Fund, Asian Local Bond Fund, and Asian Bond Fund.

1.95% p.a.USD 1.81 million

US Dollar31st December

0.8

0.9

1.0

1.1

2-Nov-17 2-Dec-18 2-Jan-20

Equity 60.0%

Bond 37.3%









In the context of fixed income, sovereign yields broadly rose in December as markets remained firmly in risk-on mode amid the confirmation of the US-















The Fund remains significantly overweight equities which has been funded largely through a sale of Asian USD bonds.

Fund Manager's Commentary on PRULink Asian Balanced Fund











Fund Objective


Fund

Highest NAVPU reachedLowest NAVPU reachedInitial NAVPU

Top 5 Holdings:

ISHARES SELECT DIVIDEND ETF



0.6%

EASTSPRING INVESTMENTS ASIAN EQUITY INC - D

CLASS6.1%




03 September 2018 Diversified1.04561

PHP 1.73 billion Eastspring Investments LimitedPhilippine Peso 1.95% p.a.

Fund Statistics 1.060630.95748

31st December 50% JACI + 50% BofA ML US HY Con

1-Month 1-Year 5-Year Year-to-date Since Inception

The fund seeks to provide investors with regular payout by investing in a diversified portfolio consisting primarily of high yield bonds and other fixed income/debt

securities denominated in US dollars, issued in the US market rated below BBB-, as well as fixed income/debt securities issued by Asian entities or their subsidiaries. The

Fund may in addition, at the Fund Manager's discretion, invest up to twenty percent (20%) of its assets in dividend yielding equities.

6.2%









PRULink Peso Cash Flow Fund

Hedged Share Class

2 (Moderate)

(27 Dec 19)(02 Jan 19)

(03 Sep 18)



Asset Allocation

EASTSPRING INVESTMENTS US HIGH YIELD BOND - D

CLASS54.9%

1.00000

EASTSPRING INVESTMENTS ASIAN BOND - D CLASS

USD32.2%

-0.10% 9.20% n.a. 9.20% 3.41%

0.9

1.0

1.1

2-Sep-18 2-May-19 2-Jan-20

Bond 87.0%

Equity 12.4%


Fund Manager's Commentary on PRULink Peso Cash Flow Fund Hedged Share Class








In the context of fixed income, sovereign yields broadly rose in December as markets remained firmly in risk-on mode amid the confirmation of the US-















The Fund has further increased its equity position and has moved overweight to US High Yield Bonds at the expense of Asian USD Bonds.





prulink bond fund - pru life uk · established in 1996, pru life uk is a subsidiary of british...

Documents